Williams Companies Profit Falls on Weak Economy
Natural gas provider Williams Companies said Thursday that its fourth-quarter profit fell 49 percent due to weak economic conditions and sharply lower commodity prices, and lowered its 2009 profit outlook for its consolidated segments on commodity price pressure and scaled-back production.
Quarterly earnings slid to $115 million, or 20 cents per share, compared with $225 million, or 37 cents per share, in the prior-year period. Excluding special charges and discontinued operations, the company reported an adjusted net income of $192 million, or 33 cents per share.
Analysts surveyed by Thomson Reuters estimated a profit of 30 cents per share on average. Analysts typically exclude one-time items.
Revenue fell 12 percent to $2.2 billion, from $2.5 billion during the same period last year. Analysts forecast an average revenue of $2.9 billion.
For the full-year, Williams Cos. reported a profit of $1.41 billion, or $2.40 per share, up from $990 million, or $1.63 per share in 2007. Revenue rose 18 percent to $12.4 billion.
The company lowered its consolidated segment 2009 profit outlook based on expectations for continued pressure on commodity prices and a modestly reduced rate of natural gas production. Its new range is between $1.35 billion and $1.93 billion and earnings per share between 60 cents and $1.10 per share. The earlier estimate ranged between $1.95 billion and $2.90 billion and earnings per share between $1.25 and $2.05 per share.
Its consolidated segment profit includes results for its exploration and production, midstream and gas pipeline, as well as gas marketing and other segments. These estimates are adjusted to remove the effect of mark-to-market accounting.
Williams Cos. also slashed its capital spending outlook to between $2.15 billion and $2.45 billion, down more than 20 percent from its earlier estimate. The company's total capital expenditures in 2008 were $3.59 billion. The company said this reduction is based on expectations for lower spending in its main segments due to lower energy prices, a slow economy, difficult financial markets and lower expected costs.
The company also announced Thursday that in 2008 it increased its domestic and international proved natural gas and oil reserves by 200 billion cubic feet equivalent to about 4.5 trillion cubic feet equivalent, citing continued development of its drilling inventory as the driving force of growth. In 2008 Williams Cos. replaced its U.S. wellhead production of 406 Bcfe at a rate of 148 percent.